Effective Management Of Service Marketing

Marketing Demand and Supply

Demand and supply management continues to be a challenge for service managers. Despite
the importance of this aspect of management and the impact it can have on profits, little
is understood about this sometimes ambiguous aspect of service management.
Is it possible for services such as banks, retail establishments, and restaurants to influence
when customers will desire their services.
Marketing Demand and Supply through capacity planning
• Demand is the amount of a particular economic good or service that a consumer or
group of consumers will want to purchase at a given price. Capacity is the amount
available at given price.
• Managing Capacity means managing the limits of an organization's resources, such as its
labour force, manufacturing and office space, technology and equipment, raw materials,
and inventory
• Capacity is usually constant whereas demand usually fluctuates. Overuse or underuse of
a service results in Gap 3 of the Gap model- failure to deliver what was designed and
planned
Optimum vs. Maximum Capacity
• Maximum capacity on the other hand represent the absolute limit of service availability.
• Using capacity at optimum level means the resources are fully employed but not
overused and customers are receiving quality services.
Example:
• Theatre- Maximum capacity= Optimum capacity .
• University Classroom- not desirable to have maximum capacity utilization.
 Demand Patterns
To manage fluctuating demand in a service business, it is important to have a clear understanding
of demand patterns, why they vary, and the market segments that comprise demand at
different points in time.
Charting of demand patterns
The organization needs to chart the level of demand over relevant time periods. Organizations
that have good computerized customer information systems can do this very accurately. The
others may need to chart demand patterns more informally. Daily, weekly and monthly
demand levels should be tracked.

Predictable Cycles

• When organizations chart down their demand patterns. predictable cycles may be detected.
• Certain service firms have predictable demand patterns.
• For example for a tax accountant, it is generally predicted that demand will be high at times
when taxes are due.
• For hotels it is predicted that demand will be high during vacations.
• Similarly for telecomm industry demand will be high at certain holidays and times of the
week and day.
 Demand Patterns by Market Segment
• If an organization has detailed records on customer transactions, it may be able to
disaggregate demand by market segment, revealing patterns within patterns. Or
the analysis may reveal that demand from one segment is predictable while
demand from another segment is relatively random.
• For example, many auto service centres experience more walk- in- customers on
Monday morning than any other day of the week.
• Knowing that this pattern exists, some clinics schedule more future appointments
(which they can control) for later days of the week, leaving more of Monday
available for same-day appointments and walk-ins.
Strategies for matching Capacity & Demand
When an organisation has clear grasp of its capacity constraints & an understanding of
demand patterns, it is in a good position to develop strategies for matching supply
and demand
2 general approaches
1) To smooth the demand fluctuations by shifting demand to match existing supply .
2) To adjust capacity to match fluctuations in demand.
 Yield Management
Yield Management
• “ It the process of allocating right type of capacity to the right type kind of
customer at the right price so as to maximize revenue or yield.”
• The goal of yield management is to produce the best possible financial
return from a limited available capacity.
• Using yield management models, organisations find the best balance at a
particular point in time among the prices charged, the segments sold to,
and the capacity used.
• It is the ratio of : yield = actual revenue/ potential revenue
Implementing a Yield Management System
• To implement a yield management system, an organisation needs detailed
data on past demand patterns by market segment as well as methods of
projecting current market demand.
 Internal marketing of services
• Internal marketing is a means of involving staff at all levels in effective marketing
programmers by enabling them to understand their role within the marketing process.
• Internal marketing programs consist of training and staff development, effective internal
communications and integration schemes, designed to enhance knowledge and
understanding of the overall marketing orientation within the organization. 
Definition
Internal Marketing (IM) is an ongoing process that occurs strictly within a company or
organization whereby the functional process is to aligns, motivates and empowers
employees at all management levels to consistently deliver a satisfying customer experience .
Key concepts of internal marketing
• IM functioning as a continual internal 'upskilling' process. 
• Alignment of the organization’s purpose with employee behaviour.
• Motivation, reframing and empowerment of employee attitude.
• Inside-out management approach.
• Retaining a positive customer experience throughout the business objectives

Internal Marketing Is The Key To Achieve objectives

• Commitment to the goal of guaranteeing the best possible treatment of customers
• participating actively in achieving the organisation's goals
• Creating a potential for long-term success
 Role of internal marketing
• Management Of Change: Internal marketing may be used to place, and gain
acceptance of new systems such as the introduction of information technology
and new working practices, and other changes.
• Building Corporate Image: Internal marketing's role is to create awareness and
appreciation of the company's aims and strengths - as all employees are potential
company ambassadors.
• Strategic Internal Marketing: which aims at reducing inter-departmental and
inter-functional conflict and developing the co-operation and commitment needed
to make external marketing strategies work.
ESSENTIALS OF SUCCESSFUL INTERNAL MARKETING PROGRAMMES 
The four most important areas within the organization's internal environment which
are essential for an internal marketing programme are:
• Motivation
• Co-ordination
• Information
• Education
 COMPONENTS OF INTERNAL MARKETING PROGRAMMES
1. Information gathering to assess :
• Employee knowledge
• Attitudes
• Behaviour.
2. Management action :
• Selection
• Training
• Motivation
• Direction
DEVELOPING INTERNAL MARKETING PROGRAMMES
• Market definition : in terms of formal and informal lines of communication and
authoritative power.
• Market research :
• Employee attitudes towards the organisation and its mission Levels of job
satisfaction
• Assessing skill and knowledge needs
• Needs and wants of employees
 DEVELOPING INTERNAL MARKETING PROGRAMMES
• Marketing action: Selection and implementation of appropriate marketing activities
to achieve optimum internal marketing success. Better internal communications,
teamwork and employee empowerment are some of the aims of internal
marketing. 
• Market segmentation : To ensure most effective, accurate and appropriate
targeting of internal marketing efforts. Bases for segmentation may be determined
as a result of the market research or on the basis of levels in the organisation.
Marketing action: Selection and implementation of appropriate marketing activities
to achieve optimum internal marketing success. Better internal communications,
teamwork and employee empowerment are some of the aims of internal
marketing.
• Marketing communication : Accurate and timely spreading of marketing
information should be undertaken, both internally and externally. This process
should be targeted to encourage participation in achievement of personal and
organizational goals. In-house magazines, regular team briefings and
encouragement of better two-way communications.
• Marketing orientation : The organisation's marketing objectives and mission must
be made clear to all employees, and clearly defined individual goals set down to
enable personnel to see their own contribution to achieving the organisation’s
objectives.
External Marketing
External VS internal Marketing service strategy
External VS internal Marketing service strategy